Hilton: Tru to its Brand?

10 Pages Posted: 20 Oct 2018 Last revised: 10 Nov 2021

See all articles by Michael J. Schill

Michael J. Schill

University of Virginia - Darden School of Business

Gerry Yemen

University of Virginia - Darden School of Business

Abstract

Tripp McLaughlin was senior director of brand management at Hilton Worldwide in McLean, Virginia, when the company decided to explore growth through the launch of a new midscale brand in 2015. McLaughlin and team spent a year strategizing. They developed a prototype midscale property called Tru by Hilton that would be simple, spirited, and grounded in value. By April 2016, the first Tru by Hilton opened in Oklahoma City. While excited about the launch, McLaughlin still harbored the concerns he had had from the beginning. Should Hilton fill the midscale gap? Could it successfully differentiate from competitors, and could it build financial success for Hilton at a lower price point?

Excerpt

UVA-F-1852

Rev. Mar. 13, 2019

Hilton: Tru to Its Brand?

Tripp McLaughlin was senior director of brand management at Hilton in McLean, Virginia, when the company decided to explore growth through the launch of a new brand in 2015. Hilton's portfolio had a strong global awareness and customer satisfaction in the luxury and upscale segments. Yet there were two segments of the industry without Hilton brands—economy and midscale. In the past, Hilton had moved away from both. The only entrance in the midscale segment, Hampton by Hilton brand in the early 1980s, was so successful the brand moved into the upper-midscale category. This left a gap in the midscale and economy space that seemed to need a Hilton presence. And a healthy signal from consumers indicated that the midscale hotel space, in particular, was marked by lack of choice and uncertainty around the brands already in the segment.

McLaughlin would work under a senior vice president on a concept to launch a brand to compete in the midscale market. Keenly aware that it was easier to improve the overall Hilton halo by building great luxury resorts in the Maldives or Bali than by building great midscale hotels in the suburban United States, McLaughlin and team spent a year strategizing around the concept. They worked to develop a prototype midscale property called Tru by Hilton that would be simple, spirited, and grounded in value.

By April 2016, the first Tru by Hilton opened in Oklahoma City. While excited about the launch, McLaughlin still harbored the concerns he had had from the beginning. Should Hilton fill the midscale gap? Could it successfully differentiate from competitors, and could it build financial success for Hilton at a lower price point?

. . .

Keywords: hotel industry, branding, franchise, Hilton, consumer research, service industry, brand equity

Suggested Citation

Schill, Michael J. and Yemen, Gerry, Hilton: Tru to its Brand?. Darden Case No. UVA-F-1852, Available at SSRN: https://ssrn.com/abstract=3270163 or http://dx.doi.org/10.2139/ssrn.3270163

Michael J. Schill (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4071 (Phone)
434-243-7676 (Fax)

HOME PAGE: http://www.darden.virginia.edu/faculty/schill.htm

Gerry Yemen

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

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